Comments for Royal Dutch Shell plc .com http://royaldutchshellplc.com News and information on Royal Dutch Shell Plc. Mon, 15 Dec 2014 07:27:22 +0000 hourly 1 http://wordpress.org/?v=4.0.1 Comment on Shell Blog by earclosetotheground http://royaldutchshellplc.com/wp-wall-guestbook/#comment-1103130 Mon, 15 Dec 2014 07:27:22 +0000 http://royaldutchshellplc.com/?page_id=16226#comment-1103130 London Lad: we agree that buying BP now is writing an open check. Until its legal liabilities are established (and possibly confirmed by a higher court), a buyer has no idea how to assess the future cash commitments related to Gulf spill. The difference with the BG situation is that a more creative Shell Board would have considered what BG did itself later on: namely floating off the downstream gas business and its retail charging and collection business. In other words, it was arisk that could be managed> Macondo is not (at this point).
As a result, Shell lost a great opportunity.

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Comment on Shell Blog by Outsider http://royaldutchshellplc.com/wp-wall-guestbook/#comment-1102790 Sun, 14 Dec 2014 15:34:04 +0000 http://royaldutchshellplc.com/?page_id=16226#comment-1102790 Relieved: My point entirely. If unconventional (ie Bakken/Eagle Ford….) wells need to be worked over after 1-2 years of production (at a cost similar to the drilling of a new well) we will see a rebalancing of supply and demand within a couple of years – it will not be economical to maintain production and the wells will be shut in or abandoned. Wells that have already been drilled are “sunk costs” and will be produced for as long as possible, as is always the case. The difference with unconventionals is that “as long as possible” means 1-2 years rather than 10-20 years as was the case with conventionals.

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Comment on Shell Blog by Relieved http://royaldutchshellplc.com/wp-wall-guestbook/#comment-1102716 Sun, 14 Dec 2014 11:03:31 +0000 http://royaldutchshellplc.com/?page_id=16226#comment-1102716 Outsider: North Dakota just celebrated the production of 1 billion barrels of oil from the Bakken shale. Two thirds of that production came in the last 3 years. These wells pay off very quickly at $100 a barrel but production declines very rapidly as well. The same holds true for the Eagle Ford shale in Texas. With drilling stalled in these two areas production will decline quickly,as will the ‘new’ shale oil supply of US produced oil. This could take a couple of million barrels out of US and world daily production. Oil prices won’t rebound overnight, but they will rebound and go higher unless other sources of energy expand or new technologies for energy production mature and expand. Without new drilling and new supplies coming online oil production world wide will decline. Low prices expand demand. Eventually, there is a collision between supply and demand, and it won’t take long to occur. We have seen it before.

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Comment on Shell Blog by Outsider http://royaldutchshellplc.com/wp-wall-guestbook/#comment-1102239 Sat, 13 Dec 2014 13:41:26 +0000 http://royaldutchshellplc.com/?page_id=16226#comment-1102239 Relieved: I agree that the price of oil in cyclical, but the production decline of unconventional wells is much faster than the decline of conventional wells. I would expect a year or two before there is a marked decline in unconventional production sufficient to balance overall supply and demand.

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Comment on Shell Blog by Relieved http://royaldutchshellplc.com/wp-wall-guestbook/#comment-1101753 Fri, 12 Dec 2014 16:48:44 +0000 http://royaldutchshellplc.com/?page_id=16226#comment-1101753 Oil prices have relatively long term (relative to other commodities) price swings. In general the highs (or lows) come and go about every seven years (roughly). This swing time is related to the lag time necessary to bring on new production, and for current productions levels to decline enough to stimulate higher prices and increased drilling and production.
Exxon is probably generally correct in their assessment of where oil prices are headed over the long term. As production now declines because of low prices for crude, it won’t be long before prices start an upswing. Whether BP can last another couple of years at current or lower prices for crude is another matter.

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